no, they will not lose the house, they extended the house, this expansion is the problem, if the administration says that this extension is incorrect, they will have to demolish the part of house enlarged but not the house.

The lawsuits against Carlos Morales have been archived.
According to the judicial authority, there is no evidence that Carlos could have committed ​​an urban offense. The Prosecutor believes that of the research is concluded that there is no evidence that Carlos Morales committed a urban offense.

Forgive me for the translation yet it is very hard to explain, my english is bad but I hope that you may understand it.
I do not know much about the law, but the legal process has two phases one, is the investigation and other the trial. One difference: Suspect person and accused person , is not the same. the suspect(in spanish "imputado") is being investigated by one possible offense. And the accused person, the investigation has ended and the judge considered that existence of evidences that he has committed one offense, .....
Carlos Morales was suspected("imputado"), the judicial authority archives suspicion because there NO evidences or proofs.
IN CONCLUSION, IN RESUME: Carlos Morales is free from suspicion, he has no legal problems, .